Shop Smart

Start your search by looking at homes at the bottom of your price range, giving you room to make a higher offer.

Before you set foot in your first open house, find out what you can really afford to buy. You'll need a minimum down payment of 3.5% to get an FHA mortgage and 5% for a conforming one backed by Fannie Mae or Freddie Mac -- available for loans of $417,000 or less. If you're buying a home that requires a jumbo loan, you must put down a minimum of 10% to 15% to get a conforming loan of up to $729,750 in cities designated as high-cost. Closing costs typically run 3% to 6% of the purchase price. You'll need cash for an earnest-money deposit, too -- from 1% to 3% of the purchase price, depending on where you live.

Get preapproved with a lender to reassure sellers of your purchasing power. A loan officer will pull your credit score (this may cost $50 or so) and assess your income and savings.

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Most buyers begin their search online. But remember, photographs may steer you wrong. You might dismiss a great house if photos are missing or poorly executed. Or, attracted by a photo of a gorgeously updated kitchen, you might visit only to find that the rest of the house requires buckets of money and time. Touring open houses is another good way to start homing in on neighborhoods.

In a process akin to speed dating, exclusive buyer's agent Benjamin Clark -- the Salt Lake City agent who represented Andy May and Lexi Davis -- likes to show buyers as many homes as possible, as quickly as possible. This helps them refine their wish list. Pretty soon they're telling me, 'This is a good deal,' says Clark. In the end, that helps them avoid buyer's remorse. Clark also likes to look at listings that sellers have recently pulled from the market, perhaps because they've begun a remodeling project or decided they want a later closing. Those can be good deals.


It's smart to start looking at homes near the bottom of your price range rather than the top because you'll have room to bid higher. Also, if you start high and decide you can't or don't want to spend that much, you may end up disappointed because nothing at the lower end is as appealing, says Coral Gables, Fla., agent Linda Tartak.

Once you begin to visit homes, avoid the common mistake of expecting everything to look like HGTV, says Milwaukee agent Patricia Tasker. Don't overlook houses that might simply need paint and a bit of updating. They may be a good value, and investing a little sweat equity won't kill you, she says.